Schnitzer Steel Industries Inc., Portland, Oregon, has reported earnings per share from continuing operations of 46 cents and adjusted earnings per share of 48 cents for its second quarter of fiscal 2019, which ended Feb. 28, 2019. This compares with reported and adjusted earnings per share from continuing operations of 57 cents and 58 cents, respectively, for the first quarter of fiscal 2019 and reported and adjusted earnings per share from continuing operations in the second quarter of fiscal 2018 of $1.42, which included discrete tax benefits of 52 cents per share.

The company says its Auto and Metals Recycling (AMR) segment achieved operating income of $22 million, or $25 per ferrous ton, compared with operating income in the first quarter of fiscal 2019 of $23 million, or $25 per ferrous ton. On a sequential basis, AMR’s performance benefited from additional productivity initiatives and a decrease in selling, general and administrative (SG&A) expense, which Schnitzer says substantially offset seasonally lower volumes and retail sales, which were adversely affected by severe winter weather and lower average ferrous net selling prices of 6 percent.

Schnitzer’s Cascade Steel and Scrap (CSS) segment achieved operating income of $6 million compared with $5 million in the second quarter of fiscal 2018. The improvement in CSS’s year-over-year performance was driven primarily by a 19 percent increase in finished steel average net selling prices and benefits from productivity initiatives. This increase was partially offset by the increase in the cost of steel-making raw materials and a 25 percent decrease in finished steel sales volumes that were affected by construction delays in its West Coast markets resulting from severe winter weather in California and the Pacific Northwest, according to the company.

“Our team delivered a strong second-quarter performance in a challenging environment that reflected declining prices for scrap during the winter months and severe weather in our West Coast and Pacific Northwest markets,” says Tamara Lundgren, Schnitzer president and chief executive officer. “AMR’s results reflected benefits from the swift execution of productivity initiatives, which are tracking ahead of schedule, and the team’s ability to optimize purchase volumes and to diversify sales. CSS delivered stronger year-over-year operating and financial results despite weather-related construction delays that impacted sales volumes. We generated strong operating cash flow and reduced debt while continuing to return capital to our shareholders through both share repurchases and our quarterly dividend.”

She adds, “Looking forward, we remain focused on the execution of our productivity initiatives and our capital investment strategy to support our objectives of lowering processing costs, increasing recovery rates, and further developing products to meet our customers’ needs.”

Schnitzer reports that its ferrous sales volumes in the second quarter decreased 4 percent compared with the prior year’s second quarter and 7 percent sequentially, primarily because of the adverse impact on supply flows from severe weather conditions and the lower price environment. However, nonferrous sales volumes were 9 percent higher compared with the prior year’s second quarter, which the company attributes primarily to the timing of shipments. Nonferrous sales volumes were 8 percent lower compared with the first quarter of fiscal 2019 largely because of the lower supply flows.

Export customers accounted for 60 percent of Schnitzer’s total ferrous sales volumes. The company says it shipped its products, including ferrous and nonferrous, to 22 countries in the second quarter of fiscal 2019. Bangladesh, South Korea and Turkey were its top export destinations for ferrous shipments.

Schnitzer’s average ferrous net selling prices decreased $27 per ton, or 9 percent, compared with the prior year’s second quarter and decreased $19 per ton, or 6 percent, sequentially. Average nonferrous net selling prices decreased 19 percent compared with the second quarter of fiscal 2018 and decreased 2 percent sequentially.

Schnitzer reports that its operating income was $22 million in the second quarter, which was $1 million, or 6 percent, less than in the first quarter of fiscal 2019 and $23 million, or 52 percent, less compared with the second quarter of fiscal 2018. Operating income per ferrous ton of $25 was consistent sequentially and represented a decrease of $25 per ton, or 50 percent, from the prior year’s second quarter, the company says.

Sequentially, the company says AMR’s performance reflected additional benefits from productivity initiatives and reduced SG&A expense, including lower incentive compensation accruals, which substantially offset seasonally lower sales volumes and retail sales. Year-over-year margin compression resulted primarily from the decline in net selling prices for nonferrous and ferrous products, which outpaced the reduction in purchase costs for raw materials, partially offset by the benefits from productivity initiatives and lower SG&A expense. Second quarter operating results include an adverse impact from average inventory accounting of $1 million compared with a benefit of $4 million in the second quarter of fiscal 2018 and an immaterial impact in the first quarter of fiscal 2019.

In its CSS business, finished steel sales volumes in the second quarter were 25 percent lower year over year and down 21 percent sequentially, primarily because of weather-related construction delays in its West Coast. Recycling revenues declined significantly year-over-year and sequentially as a result of lower ferrous export sales and selling prices.

CSS operating income for the second quarter of fiscal 2019 was $6 million, an improvement from the prior year’s second quarter. The improved year-over-year performance reflected an expansion in finished steel margins resulting from higher average net selling prices and benefits from productivity initiatives, partially offset by the increase in the cost of steelmaking raw materials, the impact of the lower finished steel sales volumes and higher costs associated with planned maintenance. Sequentially, operating income declined by $6 million, driven primarily by the impact of the lower sales volumes and higher production costs associated with planned maintenance, Schnitzer says.

In the second quarter of fiscal 2019, consolidated financial performance included corporate expense of $8 million, a decrease of $9 million from the prior year’s second quarter and a decrease of $4 million sequentially, driven primarily by lower incentive compensation accruals and, compared with the prior year, lower legal and professional services expenses.

Schnitzer says it made progress implementing and executing productivity initiatives targeting $35 million in benefits announced earlier in fiscal 2019. Consolidated results in the second quarter of fiscal 2019 reflected approximately $9 million in benefits from these measures, of which approximately $7 million were achieved by AMR and the remainder by CSS and corporate. The company says it expects to achieve at least 75 percent of the total targeted benefits in fiscal 2019, with the full amount expected to be achieved in fiscal 2020.

The second quarter of fiscal 2019 reflected operating cash flow of $35 million. Total debt at the end of the second quarter of fiscal 2019 was $163 million, and debt, net of cash, was $150 million, a decrease compared with $169 million and $157 million, respectively, at the end of the first quarter of fiscal 2019.

Pursuant to its ongoing authorized share repurchase program, during the second quarter, Schnitzer says it repurchased approximately 263,000 shares, or almost 1 percent, of its Class A common stock in open market transactions. It also returned capital to shareholders through its 100th consecutive quarterly dividend.

PepsiCo strikes alliance to boost Latin American recycling incentives

PepsiCo has announced the launch of “Recycling with Purpose,” which it calls a circular economy model designed to promote recycling in Latin America and the Caribbean region.

“PepsiCo wants to be part of the solution and we will continue to work to build a world where the plastics we use never become waste,” says Monica Bauer, vice president of corporate affairs at PepsiCo Latin America.

Regarding the new program, which involves an alliance with recycling incentives technology provider ecoins, Bauer adds, “We acknowledge that PepsiCo can’t do this alone.”

PepsiCo describes ecoins as an initiative founded in Costa Rica designed to increase the collection of PET bottles and other materials. The program allows consumers to exchange their plastic materials for ecoins, a virtual currency they can use to earn discounts on a variety of products and services.

Bauer tells the Recycling Today Media Group the program should do more than boost the collection of PET beverage bottles only. “Ecoins works across all recyclable materials that have a market value in that country,” she comments. “In Costa Rica, for example, they are collecting PET, cardboard, aluminum, Tetra Pak, glass, tires and electronics, among others. Thus, recycling is not limited to PepsiCo brand’s packaging materials.”

To join the ecoins program and begin earning discounts, participants first create a virtual profile where they can use their email address to store ecoins like a virtual account. Participants can then take clean, dry, and separated materials to collection centers where they will receive ecoins in exchange for the items.

“Ecoins was created in Costa Rica and launched in 2018 in response to an increasing demand from conscious consumers to be active in solving environmental problems in countries that lack an adequate system of separation, collection and recovery of waste,” says Karla Chaves, director of the program. “It integrates concepts such as discounts, loyalty, digital marketing, gamification—which are so familiar in our system of consumption—but from a new vision: that of the circular economy. The experience that ecoins offers is that of facilitating the consumer’s learning of the process of the separation of valuable materials while increasing the volume and profitability of the collection centers.”

Through the Recycling with Purpose partnership, PepsiCo will support the expansion of the ecoins platform to 10 countries in Latin America during the next two years. That roster of nations includes Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama, Peru, Guatemala and Jamaica.

PepsiCo estimates in 2019 ecoins will have 300,000 accounts and provide recycling awareness to nearly 1 million people thanks to social media campaigns covering seven countries.

“At PepsiCo we understand that recycling rates across the food and beverage industry are insufficient,” says Laxman Narasimhan, PepsiCo Global chief commercial officer and CEO of PepsiCo Latin America. “Through this partnership with ecoins, we’re working to make sustainable plastic a reality in the region by creating a circular economy in which plastics become currency, not waste.”

Bauer says she also sees the ecoins alliance as a critical step forward. “As we lack recycling infrastructure in many LatAm countries, we need to involve consumers to make recycling a sustainable model. We understand that grassroots recyclers are the basis of any successful recycling system, and they need to continue being part of any system. We will continue to work on joint efforts with the recycling industry to increase access to recycling materials [and] we will develop agreements with recyclers to buy materials a fair market price [to] use the PET collected to produce recycled resin (rPET). The recycled resin produced by PET collected in this program can be used in new Pepsi bottles.”

PepsiCo Latin America is a division of the global firm that includes all of its beverage, food and snack businesses in 34 Latin Americana and Caribbean nations. The division generated $7.4 billion dollars in net revenue in 2018, according to PepsiCo.

Hirose has accepted a new position within Hitachi, now serving as chairman and director of HCMA and VP of the Hitachi Americas Operations Group. Quinn becomes managing director, reporting to Hirose.

Thanking HCMA employees for their support during his tenure, Hirose noted his close collaboration with Quinn in establishing HCMA as a new top-tier player in the wheel loader industry.

“Al joined us in 2017 and took the lead in several of our key customer-facing roles,” Hirose says. “His profound expertise and experience in our industry have been crucial to our success in sales, marketing, parts and service and purchasing. Now, as managing director, he will continue to provide leadership in those areas, with additional responsibilities for corporate and production operations.”

As Quinn accepted his appointment, he recognized key milestones that HCMA has achieved since it began operations in January 2018.

“We have certainly gone through tremendous change in the past two years, but I want to say thank you to Masaaki for his dedication and commitments to improving our company,” Quinn says. “It is very rewarding to see the improvements that we are making in market share, profitability and in better serving our customers.”

Under Hirose’s leadership, HCMA has seen 175-percent growth in revenue and has nearly doubled its market share, the company says. Last June, the company celebrated the grand opening of its new U.S. corporate headquarters and training facility, representing a $4 million investment in support for customers and dealers in the Americas.

Speaking to more than 30 Hitachi wheel loader dealers at HCMA’s first national conference, Quinn said, “It’s great for all wheel loader customers to have access to an alternative global brand. We expect to exceed customer expectations.

“Expectations are high, and that also drives change. While we have accomplished much, we still have much more to do,” Quinn continued. “We will stay on course to implement the strategies and plans that have been working for us through the past two years. No radical new plans are expected. I am very optimistic that we are creating a very bright future for HCMA.”

Liebherr reports increase of sales in 2018

Switzerland-based manufacturing company reports more than 10 million euros in sales.

Despite a slight decline in overall economic growth, Switzerland-based Liebherr Group says its construction machinery and mining equipment divisions and product areas saw an overall increase in sales revenue in 2018. The company reports sales of 10.55 million euros, representing a 7.5 percent increase compared with the previous year.

Revenues from construction machinery and mining equipment increased by more than 10 percent to 6.8 million euros, with especially strong growth in earthmoving equipment and mobile cranes, according to the company. Sales rose 2 percent in other product areas, including gear technology and automation systems.

The growth in sales can be attributed to higher demand in several sales regions, the company says, especially in Germany and France and markets in the U.S., Australia and China. In non-European countries, sales fell because of the negative effects of currency movements in Russia.

Liebherr Group reports a net profit of 321 million euros in 2018, a slight increase above the previous year. The company also reports an increase in workforce, ending the year with more than 46,000 employees worldwide, an increase of 2,3000.

Research and development

Liebherr invested a half billion euros in research and development in 2018, used in the development of new products and joint research projects with universities. An area of focus was “the construction site of the future.”

Liebherr says it started a development partnership with the RWTH Aachen within the framework of the Center Construction Robotics and is also involved in the "Construction 4.0" joint project initiated by the German Mechanical Engineering Industry Association (VDMA).

Production, sales and service

Liebherr Group increased its investment activities by 51 million euros compared with 2017. New construction and material handling equipment will be developed, tested and inspected at a new exhibition center in Germany, the company says.

In addition, the group has invested in Bad Schussenried, Germany, which will serve as a new manufacturing site for concrete pumps.

Liebherr says it is starting to install a heavy-duty crane in the port of Rostock. The TCC 78000 portal crane will be available for external heavy load handling in the port. In the U.S., Liebherr investment projects are intended to support the company’s long-term growth strategy in the U.S. crane, construction machinery and concrete technology markets.

Demand in most regions and industries may develop positively in the future and sales revenues are expected to rise in 2019, the company says.

The Phoenix Public Works Department has announced a partnership with Renew Phoenix to turn Nos. 3-7 plastics into fuel. The partnership is the latest venture in the city's “Reimagine Phoenix" initiative to increase its waste diversion rate to 40 percent by the end of 2020 and ultimately reach zero waste by 2050.

“I believe in taking bold chances to make big change,” Phoenix Mayor Kate Gallego says. “The idea of making fuel with the plastics we are throwing away is certainly an 'out of the box' idea that I am thrilled to say will also bring jobs and revenue to our city. During a time when cities are giving up on recycling, Phoenix is again leading the way in setting the gold standard for innovation and creativity.”

China used to be a popular destination for mixed plastics bales, but changes to the country’s scrap import policies have cut off that market. In some regions of the U.S., material recovery facility (MRF) operators have had difficulty marketing Nos. 3-7 bales as a result and have had to landfill these plastics.

“The future is all about recycling, sustainability and doing our part to ensure future generations have a healthy planet," says Councilwoman Thelda Williams, who serves as the chair of the Water, Wastewater, Infrastructure and Sustainability (WWIS) Subcommittee. “I am certain that once others see what we are doing, they will want to be part of this movement to prevent more materials from being simply thrown away."

Renew Phoenix, a joint venture between Generated Materials Recovery, Phoenix, and Renewlogy, Salt Lake City, will build a facility to process the materials on the city's Resource Innovation Campus.

“I am excited for what this partnership brings to Phoenix," says Councilman Michael Nowakowski, whose district is home to the city's Resource Innovation Campus. “This new, innovative venture will encourage other businesses to bring next-generation technology to Phoenix to help us reach our diversion goal of 40 percent by 2020."

Renew Phoenix was selected through a competitive request for proposal (RFP) process. The company will use a proprietary chemical recycling process to reverse the plastics into their basic molecular structure, which will allow them to convert the plastics into fuel, according to a news release issued by the city of Phoenix. Renew Phoenix will bring as many as 15 full-time jobs to the valley, after investing more than $5 million into the project.

"Renewlogy is excited about bringing our technology to Phoenix and creating a more circular economy around plastic waste locally," says Priyanka Bakaya, founder and CEO of Renewlogy. “Phoenix will serve as a model for cities around the country looking for local solutions for plastic waste.”

At its Salt Lake City facility, Renewlogy processes bags of mixed plastics—including film, small form plastics, multilayer packaging and Nos. 4-6 plastics, which are typically not accepted in curbside recycling programs—that are collected through the Hefty Energy Bag Program in Boise, Idaho and Omaha, Nebraska.

The company also is embarking on a project sponsored by National Geographic that targets river plastics. Starting in India, focusing on the area around the Ganges, which the company says is estimated to contribute 1.2 billion pounds of plastic waste to the oceans each year, Renewlogy in helping to address plastic collection and conversion, providing compensation for local communities.

During the Plastics Recycling Conference and Trade Show March 11-13 in Harbor City, Maryland, Bakaya said the project in India would use reverse vending machines that issue coupons to local collectors, who are largely women. A scaled-down conversion system that is mobile and off the grid will be able to process 1 ton of the collected material daily, making diesel products.

Once Renew Phoenix is at full production, the project is expected to divert 10 tons per day of mixed plastics from landfill, which equates to 60 barrels of liquid fuel. Renew Phoenix will be able to scale production to allow regional processing, the city says.

“We are proud to continue bucking the trend and pushing forward with innovation, economic development and repurposing our waste," says Ginger Spencer, Phoenix Public Works Director. “We are committed to building a circular economy and achieving our Reimagine Phoenix goals. This new venture to turn plastics into fuel is eye-opening, and we hope it will serve as a model for other cities to reimagine their own recycling programs."